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Trending ETFs

Name

As of 05/20/2024

Price

Aum/Mkt Cap

YIELD

Annualized forward dividend yield. Multiplies the most recent dividend payout amount by its frequency and divides by the previous close price.

Exp Ratio

Expense ratio is the fund’s total annual operating expenses, including management fees, distribution fees, and other expenses, expressed as a percentage of average net assets.

Watchlist

$20.23

$2.5 M

0.00%

0.99%

Vitals

YTD Return

N/A

1 yr return

N/A

3 Yr Avg Return

N/A

5 Yr Avg Return

N/A

Net Assets

$2.5 M

Holdings in Top 10

N/A

52 WEEK LOW AND HIGH

$20.3
$19.76
$20.28

Expenses

OPERATING FEES

Expense Ratio 0.99%

SALES FEES

Front Load N/A

Deferred Load N/A

TRADING FEES

Turnover N/A

Redemption Fee N/A


Min Investment

Standard (Taxable)

N/A

IRA

N/A


Fund Classification

Fund Type

Exchange Traded Fund


Name

As of 05/20/2024

Price

Aum/Mkt Cap

YIELD

Annualized forward dividend yield. Multiplies the most recent dividend payout amount by its frequency and divides by the previous close price.

Exp Ratio

Expense ratio is the fund’s total annual operating expenses, including management fees, distribution fees, and other expenses, expressed as a percentage of average net assets.

Watchlist

$20.23

$2.5 M

0.00%

0.99%

USOY - Profile

Distributions

  • YTD Total Return N/A
  • 3 Yr Annualized Total Return N/A
  • 5 Yr Annualized Total Return N/A
  • Capital Gain Distribution Frequency N/A
  • Net Income Ratio N/A
DIVIDENDS
  • Dividend Yield 0.0%
  • Dividend Distribution Frequency None

Fund Details

  • Legal Name
    Defiance Oil Enhanced Options Income ETF
  • Fund Family Name
    N/A
  • Inception Date
    May 10, 2024
  • Shares Outstanding
    N/A
  • Share Class
    N/A
  • Currency
    USD
  • Domiciled Country
    US

Fund Description

The Fund is an actively managed exchange-traded fund (“ETF”) that seeks current income while maintaining the opportunity for indirect exposure to the share price of United States Oil Fund, LP (“USO” or the “Underlying ETP”), subject to a limit on potential gains related to increases in the price of USO’s shares. While maintaining indirect exposure to the Underlying ETP, the Fund aims to generate additional income from its options investments when USO’s share price rises in value, based on the specific put options it sold.

USO is an exchange-traded product (“ETP”) that generally seeks to replicate the performance of the price of light, sweet crude oil. USO is not subject to the protections of the 1940 Act; however, the Fund and its shareholders are subject to the protections of the 1940 Act.

The Fund will not seek to invest directly in the ETP, however, due to the non-cash settlement nature of the fund’s options strategy, the Fund may be required from time to time to hold shares of the ETP. In such a case, the Fund will generally seek to sell such ETP holding the same day (to avoid adverse tax consequences to the Fund). As, further described below, at least once a week, the Fund uses an at-the-money or in-the-money put selling strategy to provide income and exposure to the price of the Underlying ETP shares, subject to a limit on potential investment gains as a result of the nature of the options strategy it employs. The Fund’s options contracts provide current income from the premium it receives from the sale of such options contracts and a limit on the Fund’s indirect participation in gains, if any, of the increase in the price of the Underlying ETP’s shares. In addition, the Fund’s in-the-money put options will provide some upside appreciation, also known as “intrinsic value.” As discussed in greater detail below, the Fund will not directly or fully participate in gains experienced by the Underlying ETP. Please see “Additional Information about the Fund” below for a description of options terminology.

At least once a week, the Fund will sell put options that are priced either at-the-money or up to five percent in-the-money (i.e., higher than the current market price). If the Fund sells an option that’s priced above the current market price, the Fund may profit if the Underlying ETP’s share price increases above its current price, stays flat, or decreases slightly (i.e., the decrease to the Fund is less than the original extrinsic premium received). This opportunity exists until the option’s expiration date, which is typically one week or less (as of the date of this prospectus, options expire each Wednesday and Friday). In other words, the Fund’s potential for profit (or exposure) fluctuates. The Fund will initially use only European FLexible EXchange® (“FLEX”) options, but may also use options that are exercisable at any time (i.e. American style options contracts).

FLEX options are exchange-traded that allow for customizable terms (e.g., the strike price can be negotiated). European FLEX options can be exercised only at expiration, not before.
The Fund will write put option contracts, which involves selling the right, but not the obligation, to sell the underlying asset (e.g., the Underlying ETP shares) at the strike price within a specified timeframe. This obligates the Fund to buy shares from the holder of the bought put. The Fund earns income from the premium received but assumes the risk of having to purchase the asset at the strike price, which could be higher than the current market price if the Underlying ETP’s share price decreases. This strategy aims to generate income and indirectly participate in the potential gains of the Underlying ETP’s shares (when writing in the money puts), with a limit on the extent of these gains due to the nature of selling put options.

The Fund’s strategy focuses on having the ability to make monthly distributions through generating income throughout each week by regularly selling put options. Simultaneously, it aims to provide an “enhanced” yield compared to traditional option-based strategies by frequently selling short-term options, typically with a duration of less than a week. This method may result in higher income than with an approach of selling longer-term options over the same period, although there is no guarantee such an approach will result in higher income.

Traditional options-based strategies typically involve selling options with a longer duration, usually with an expiry of 1 month or more. However, by focusing on selling short-dated options, generally with an expiry of less than a week, the Fund’s investments may generate higher (or “enhanced”) premiums. This is due to the dynamic of time value (or theta) of options, which refers to the rate at which an option’s value decreases as it approaches its expiry date. Typically, the rate at which an option loses value from the impact of time value (theta) will accelerate as it approaches its expiration date. Therefore, selling shorter-dated options will generally produce more premium income than selling options with longer durations less frequently.

The Fund’s options contracts provide:

indirect exposure to changes in the share price of the Underlying ETP,
current income from option premiums and, for in-the-money puts, potential income from their intrinsic value, and
a limit on the Fund’s income gains from options, if any, related to the share price of the Underlying ETP.

For more information, see the section “The Fund’s Use of Underlying ETP Option Contracts” below.

In addition to its options investments, the Fund will hold short-term U.S. Treasury securities for collateral for the options and to generate additional income for the Fund.

The Fund’s investment adviser is Tidal Investments LLC (“Tidal” or the “Adviser”) and the investment sub-adviser is ZEGA Financial, LLC (“ZEGA” or the “Sub-Adviser”).

Why invest in the Fund?

●     The Fund seeks to generate monthly income through its options strategy, which is not dependent on the price appreciation of the Underlying ETP’s shares. 

●     The Fund seeks to indirectly participate in a portion of the potential gains experienced by increases in the Underlying ETP’s shares (via income from its options holdings).

That is, although the Fund’s income gains related to gains in the Underlying ETP’s shares will be capped, the Fund’s portfolio is designed to generate income.

An Investment in the Fund is not an investment in USO, nor in oil.

The Fund’s strategy will cap its potential options income gains if USO shares increase in value.
The Fund’s strategy is subject to all potential losses if USO shares decline, which may not be offset by income received by the Fund.
The Fund does not invest directly in USO shares.
The Fund does not invest directly in oil or oil reserves.
Fund shareholders are not entitled to any dividends paid by USO.

Additional information regarding USO is set forth below.

The Fund’s Use of the Underlying ETP Option Contracts

Throughout each week, the Fund will sell at-the-money or in-the-money puts on the Underlying ETP. In particular, the Fund will sell puts with near-term expirations at a range of 0% to 5% “in-the-money” (i.e., where the strike price is above the current price of the Underlying ETP’s shares by between 0% and 5%). The Fund will receive premium income for each put sold. In addition, the strategy will provide the Fund with the opportunity to earn both time decay (described below) and, for in-the-money puts, a limited amount of upside appreciation up to the puts’ strike price (described below) plus the puts’ intrinsic value. The expiration dates at the time of purchase for the Fund’s sold puts will range from one day to a month (“Call Period”). The Fund’s participation in potential increases in the price of the Underlying ETP’s shares is based on the price of the Underlying ETP’s shares at the time the Fund sells a put option contract and the Underlying ETP’s share price at the time of the contract’s expiration.

For example, imagine the Underlying ETP’s shares are priced at $200, and a put option with a strike price of 205 is sold for $15. The difference between the strike price and the Underlying ETP’s share price is $5 (in-the-money amount). The remaining $10 (the $15 put price minus the $5 in-the-money amount) represents the put’s extrinsic value. In the case of this example:

if the Underlying ETP’s share price is $205 or more at the end of trading, the Fund would gain the full $15.
if the Underlying ETP’s share price remains at $200 at the end of trading, the Fund would gain only $10.
if the Underlying ETP’s share price fell significantly below $200 at the end of trading the Fund would lose money. For example, if the price fell to $185 per share, the Fund would lose $5.

As of the date of this prospectus, the available options are non-cash-settled. As a result, theoretically, the Fund would be obligated to receive shares of the Underlying ETP when the option was exercised. Consequently, there is a risk that the Fund may have to physically acquire the Underlying ETP shares at the strike price, which could result in the Fund holding the Underlying ETP’s share, and an asset that has declined in value. However, in such instances, the Fund will seek to avoid owning shares of the Underlying ETP by trading out of the puts prior to expiration or selling the delivered shares immediately upon receipt.

When selling put options, the Fund will generally be subject to different outcomes based on market movements and whether the options sold are at-the-money or in-the-money. Such outcomes may or may not be profitable to the Fund, depending on the circumstances, and there is no guarantee that any given situation will occur and be profitable to the Fund:

At-the-Money Options:

In-the-Money Options:

The Underlying ETP Rises above Strike (Profitable):

The Fund keeps the premium.

No physical delivery of the Underlying ETP shares is required.

The Underlying ETP Rises to or above Strike (Profitable):

The Fund keeps premium which included the gain from the intrinsic value.

No physical delivery of the Underlying ETP shares is required.

The Underlying ETP Flat (Profitable):

The Fund keeps the premium.

No physical delivery of the Underlying ETP shares is required.

The Underlying ETP Flat (Profitable to breakeven):

The Fund may be obligated to buy the Underlying ETP shares at the strike price. However, in such instances, instead of making this purchase, the Fund will trade out of the put prior to expiration.

The Underlying ETP Falls (Potentially Unprofitable):

Normally, the Fund would be obligated to purchase the Underlying ETP shares at the strike price, regardless of their lower market value. However, in such instances, instead of making this purchase, the Fund will trade out of the put prior to expiration.

The Fund’s puts are covered for their full exercise value, ensuring the loss does not exceed the value of the Fund’s portfolio.

The Underlying ETP Falls (Potentially Unprofitable):

Normally, the Fund would be obligated to purchase the Underlying ETP shares at the strike price, regardless of their lower market value. However, in such instances, instead of making this purchase, the Fund will trade out of the put prior to expiration.

The Fund’s puts are covered for their full exercise value, ensuring the loss does not exceed the value of the Fund’s portfolio.

U.S. Treasuries

The Fund will hold short-term U.S. Treasury securities as collateral in connection with the Fund’s options strategy and to generate income.

Fund’s Monthly Distributions

The Fund will seek to provide monthly income in the form of cash distributions. The Fund will seek to generate such income in the following two ways:

Writing (selling) put option contracts on the Underlying ETP as described above. The income, in the form of option premiums received from such option sales, will be primarily influenced by the volatility of the price of the Underlying ETP’s shares, although other factors, including interest rates, will also impact the level of income.
Investing in short-term U.S. Treasury securities. The income generated by these securities will be influenced by interest rates at the time of investment.

Fund’s Return Profile vs. the Underlying ETP

For the reasons stated above, the Fund’s performance will differ from that of the Underlying ETP’s share prices. The performance differences will depend on, among other things, the price of the Underlying ETP’s shares, changes in the value of the Underlying ETP put options contracts the Fund has sold, and changes in the value of the U.S. Treasuries.

The Fund’s strategy is designed to have unleveraged, 100% downside notional exposure (as described below) to the Underlying ETP. Essentially, the assignment value of the put options that the Fund invests in will match the value as if the Fund had directly purchased the Underlying ETP’s shares.

Let’s consider a scenario where the Fund has assets totaling $10 million and the Underlying ETP is priced at 200. In this instance, the number of contracts would be 500. We calculate this by dividing the Fund’s value by the value of one contract. Here, $10,000,000 divided by $20,000 (obtained by multiplying the Underlying ETP’s share price of 200 by the standard multiplier of 100) gives us 500.

However, the Fund’s notional exposure, representing the theoretical exposure of its portfolio, will drift daily due to various factors such as market movements and changes in option prices. Notional value is calculated based on the quantity of assets underlying the options positions, multiplied by the strike price of the option. The Fund may reallocate its portfolio upon entering a new position at the option’s expiration. In this process, the Fund will allow its currently held options to expire, close them, or roll (closing out of existing options contracts to purchase new options contracts) them early. Subsequently, the Fund enters new put options positions when the existing ones have expired, been closed, or been rolled early. The Fund may allow the options to expire worthless in order to reduce execution costs and minimize trading drift. 

Fund Portfolio

The Fund’s principal holdings are described below:

Defiance Oil Enhanced Options Income ETF – Principal Holdings
Portfolio Holdings Investment Terms Expected Target Maturity
Sold put option contracts

“at-the money” (i.e., the strike price is equal to the then-current share price of the Underlying ETP at the time of sale).

“in-the-money” (i.e., the strike price is above the then-current share price of the Underlying ETP at the time of sale).

Sold put option contracts provide exposure to the full extent of any price decreases experienced by the Underlying ETP shares.

Typically, weekly or less, but may extend to one-month expiration dates.
U.S Treasury Securities and Cash

Multiple series of U.S. Treasury Bills supported by the full faith and credit of the U.S. government.

These instruments are used as collateral for the Fund’s derivative investments.

They will also generate income. The Fund will generally hold US Treasuries to maturity.

6-month to 2-year maturities at the time of purchase.

To fully collateralize the Fund’s options strategy, the market value of the cash and treasuries held by the Fund is expected to comprise at least 80% of the Fund’s net assets and the market value of the options is expected to be between 0% and 10% of the Fund’s net assets. The combination of these investments provides investment exposure to USO such that the notional exposure is equal to 100% of the Fund’s total assets. The “notional exposure” is the return on or change in value of a particular dollar amount representing the underlying investment. The notional value and the market value both describe the value of a security. Notional value speaks to how much total value a security theoretically controls – for instance through options contracts. Market value, on the other hand, is the price of a security right now that can be bought and sold on an exchange or through a broker.

As a result of the Fund’s investment strategy, it may experience a high portfolio turnover rate.

The Fund is classified as “non-diversified” under the 1940 Act.

Under normal circumstances, the Fund will invest at least 80% of the value of its assets, plus borrowings for investment purposes, in financial instruments and economic interests that provide exposure to the value of the Underlying ETP shares. The Fund’s “80%” policy is non-fundamental and can be changed without shareholder approval. However, Fund shareholders would be given at least 60 days’ notice prior to any such change.

There is no guarantee that the Fund’s investment strategy will be properly implemented, and an investor may lose some or all of its investment.

USO

United States Oil Fund, LP’s (“USO”) investment objective is for the daily changes in percentage terms of its per share net asset value (“NAV”) to reflect the daily changes in percentage terms of the spot price of light, sweet crude oil delivered to Cushing, Oklahoma, as measured by the daily changes in the price of a specified short-term futures contract on light, sweet crude oil called the “Benchmark Oil Futures Contract,” plus interest earned on USO’s collateral holdings, less USO’s expenses. USO seeks to achieve its investment objective by investing so that the average daily percentage change in USO’s NAV for any period of 30 successive valuation days will be within plus/minus ten percent (10%) of the average daily percentage change in the price of the Benchmark Oil Futures Contract over the same period. USO is an exchange traded fund organized as a limited partnership that issues shares that trade on the NYSE Arca stock exchange.

Investors can access information about USO, including its prospectus and the most recent shareholder reports, online through the SEC’s website, using SEC Registration Nos. 333-272617 and 001-32834. This information, derived from USO’s filings with the SEC, is essential for investors to understand USO’s operations, investment strategy, and financial prospects. The description of USO’s principal investment strategies as outlined here is directly sourced from its prospectus.

This document pertains solely to the securities offered by USO and does not concern the shares of other securities or ETFs. All disclosures in this document regarding USO are based on publicly available documents. None of the Fund, Tidal Trust II (the “Trust”), Tidal Investments LLC (the “Adviser”), ZEGA Financial, LLC the “Sub-Adviser”), or their respective affiliates have engaged in the preparation of such publicly available offering documents or conducted any due diligence inquiries relating to such documents concerning USO. They do not represent the accuracy or completeness of any publicly available documents or other information regarding USO. Additionally, the Fund cannot guarantee that all events impacting USO’s trading price prior to the date of this document have been publicly disclosed. Future events or disclosures concerning USO could affect the value of these securities.

The Fund, the Trust, the Adviser, the Sub-Adviser, and their respective affiliates do not provide any representation regarding the performance of USO.

The Fund, Trust, Adviser, and Sub-Adviser are not affiliated with United States Oil Fund, LP (USO), or United States Commodity Funds LLC. 

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USOY - Performance

Return Ranking - Trailing

Period USOY Return Category Return Low Category Return High Rank in Category (%)
YTD N/A N/A N/A N/A
1 Yr N/A N/A N/A N/A
3 Yr N/A* N/A N/A N/A
5 Yr N/A* N/A N/A N/A
10 Yr N/A* N/A N/A N/A

* Annualized

Return Ranking - Calendar

Period USOY Return Category Return Low Category Return High Rank in Category (%)
2023 N/A N/A N/A N/A
2022 N/A N/A N/A N/A
2021 N/A N/A N/A N/A
2020 N/A N/A N/A N/A
2019 N/A N/A N/A N/A

Total Return Ranking - Trailing

Period USOY Return Category Return Low Category Return High Rank in Category (%)
YTD N/A N/A N/A N/A
1 Yr N/A N/A N/A N/A
3 Yr N/A* N/A N/A N/A
5 Yr N/A* N/A N/A N/A
10 Yr N/A* N/A N/A N/A

* Annualized

Total Return Ranking - Calendar

Period USOY Return Category Return Low Category Return High Rank in Category (%)
2023 N/A N/A N/A N/A
2022 N/A N/A N/A N/A
2021 N/A N/A N/A N/A
2020 N/A N/A N/A N/A
2019 N/A N/A N/A N/A

USOY - Holdings

Concentration Analysis

USOY Category Low Category High USOY % Rank
Net Assets 2.5 M N/A N/A N/A
Number of Holdings N/A N/A N/A N/A
Net Assets in Top 10 N/A N/A N/A N/A
Weighting of Top 10 N/A N/A N/A N/A

Top 10 Holdings

Asset Allocation

Weighting Return Low Return High USOY % Rank
Stocks
0.00% N/A N/A N/A
Preferred Stocks
0.00% N/A N/A N/A
Other
0.00% N/A N/A N/A
Convertible Bonds
0.00% N/A N/A N/A
Cash
0.00% N/A N/A N/A
Bonds
0.00% N/A N/A N/A

USOY - Expenses

Operational Fees

USOY Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Expense Ratio 0.99% N/A N/A N/A
Management Fee 0.99% N/A N/A N/A
12b-1 Fee N/A N/A N/A N/A
Administrative Fee N/A N/A N/A N/A

Sales Fees

USOY Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Front Load N/A N/A N/A N/A
Deferred Load N/A N/A N/A N/A

Trading Fees

USOY Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Max Redemption Fee N/A N/A N/A N/A

Related Fees

Turnover provides investors a proxy for the trading fees incurred by mutual fund managers who frequently adjust position allocations. Higher turnover means higher trading fees.

USOY Fees (% of AUM) Category Return Low Category Return High Rank in Category (%)
Turnover N/A N/A N/A N/A

USOY - Distributions

Dividend Yield Analysis

USOY Category Low Category High USOY % Rank
Dividend Yield 0.00% N/A N/A N/A

Dividend Distribution Analysis

USOY Category Low Category High Category Mod
Dividend Distribution Frequency None

Net Income Ratio Analysis

USOY Category Low Category High USOY % Rank
Net Income Ratio N/A N/A N/A N/A

Capital Gain Distribution Analysis

USOY Category Low Category High Capital Mode
Capital Gain Distribution Frequency

Distributions History

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USOY - Fund Manager Analysis

Tenure Analysis

Category Low Category High Category Average Category Mode
N/A N/A N/A N/A